Issue link: http://clhia.uberflip.com/i/333350
8 3.6 Increasing the Average Duration of P3s in Canada The industry's demand for long-term investments is driven by the need to find matching assets for long- term liabilities that often last several decades -- up to 50-years or more in some cases. As such, the industry is keenly interested in P3 investments that have long durations. To date, in Canada, the P3s that have been issued generally cap out at a 30-year period (plus construction) or less. However, we would note that the assets in projects such as hydroelectric projects, hospitals, schools etc. have productive life spans beyond 30 years. The industry believes that there is scope to lengthen the term of the P3s in the market to more closely match the underlying life cycle of select infrastructure assets such as hydroelectric projects, roads and hospitals and generally believe that terms out to 40 years would be appropriate for such infrastructure asset classes. Therefore, the CLHIA recommends that: • Governments set a goal, over time, to seek to extend the term of P3 projects. We believe terms of 40 years would find support in the market, subject to the requirements for effective infrastructure maintenance provisions. 3.7 Strengthening Government Commitment to P3 Projects In Budget 2014, the Government of Canada reaffirmed its commitment to PPP Canada and indicated that projects with eligible costs of more than $100 million submitted for federal funding under the new Building Canada Fund will be subject to a P3 screen. We commend this strong and positive commitment by the Government of Canada to P3s. As outlined in Figure 4 below, in the life and health insurance industry's experience, the commitment to P3s in the provinces is more varied. Ontario is the clear leader in its promotion and use of P3s with Quebec, B.C. and Alberta also being active in the P3 space.